One of the hottest tech battles is that between virtual assistants, housed in so-called “smart speakers.” So far, Amazon is dominating in the U.S. With its Echo devices and Alexa assistant. Alphabet is catching up with its Google Home gadgets, but how best to overtake Jeff Bezos’s ecommerce titan?
According to Morgan Stanley analyst Brian Nowak, Alphabet (GOOGL) should follow a strategy that’s perhaps best characterized as dumping: per Marketwatch, he said in a Thursday note that the company should literally give away one of its Google Home devices to every household in the U.S.
Yes, that would cost the company around $3.3 billion (based on the Home Mini’s retail price, so that’s obviously an imperfect calculation), and it’s about as environmentally unsustainable as a tech company could get, but Alphabet would have a lot to gain.
Of course, the point of these devices, from a strategic standpoint, is to funnel users’ retail search queries to the manufacturer’s own services. So Nowak suggests Alphabet could make its money back five times over, by encouraging households to search for products via Google rather than Amazon (AMZN).
Then there’s the opportunity for Alphabet to cross-promote its services, perhaps by delivering the Home Mini with a free trial of YouTube’s new Premium subscription service.
Amazon already integrates its Echo devices with its Prime subscription service, giving people an easy way to ask for the latest exclusive deals for Prime members, and play music from the Prime Music service.